31 May 2005: Deloitte letter to CESR on GAAP equivalence
Deloitte has submitted a letter of comment to the Committee of European Securities Regulators (CESR) on CESR's tentative conclusions that Canadian, Japanese, and US GAAP, taken as a whole, are "equivalent to IFRSs, subject to a number of additional disclosures" for the purpose of listings by non-European companies in European public securities markets. The European Commission is studying whether to allow Canadian, Japanese, and/or US GAAP to continue to be used after 2007 and has asked CESR for its views. The EC had also asked CESR to include, in its report on equivalence, a description of the enforcement mechanisms that are in place in each country. The EC has asked to have CESR's final advice by 30 June 2005. Click to download:

• CESR's Tentative Conclusions (PDF 1,048k)
• Press Release (PDF 69k)

31 May 2005: Introduktion til de internationale regnskabsstandarder

Deloitte (Denmark) has published IFRS – Introduction to International Financial Reporting Standards (in Danish). The publication summarises each IFRS/IAS together with relevant interpretations (IFRIC/SIC) as well as the main differences between IFRSs and Danish GAAP. The publication also includes a short introduction to key factors in a successful conversion to IFRSs as well as helpful checklists on key differences between IFRSs and Danish GAAP and on Danish accounting rules that must be applied even if the company is reporting under IFRSs. Click here to download IFRS – Introduction to International Financial Reporting Standards (PDF 2.4mb, 244 pages).

30 May 2005: PCAOB guidance on audits of XBRL data
The US Public Company Accounting Oversight Board (PCAOB) has published staff question and answer guidance for auditors engaged to report on whether XBRL (eXtensible Business Reporting Language) data furnished under the SEC's XBRL Voluntary Financial Reporting Program accurately reflects the corresponding information in the official SEC filings. Click for PCAOB XBRL Attestation Q&A (PDF 60k).

30 May 2005: Survey finds equity market unprepared for IFRSs
A survey of 12 leading investment banks and 30 rated investment analysts in London by financial communications consultants Citigate Dewe Rogerson has found that the investment banks are "largely adopting a 'wait and see' approach towards the reconciliation of IFRS changes in financial modelling and forecasting.... The risk is that market valuations and share prices may be affected by a prolonged period of volatility while analysts lack consensus and a consistent approach to the interpretation of financial data under IFRS." The survey found that:

30 May 2005: Commissioner McCreevy comments on IFRSs
In a speech on A Changing Landscape for Business in Europe at the annual conference of the Institute of Certified Public Accountants in Ireland, EU Internal Market Commissioner Charlie McCreevy commented on various issues relating to IFRSs, including the following:

30 May 2005: AICPA encourages FASB to study 'SME' GAAP
The Council of the American Institute of Certified Public Accountants (AICPA) has adopted a resolution directing AICPA management to work with the FASB to evaluate, where appropriate, potential changes in the recognition, measurement, and disclosure standards applicable to private (unlisted) entities. Click for AICPA Press Release (PDF 145k).

30 May 2005: Prince of Wales urges 'sustainability reporting'
In a speech on 25 May 2005 at the Annual Dinner of the Institute of Chartered Accountants in England & Wales (ICAEW), The Prince of Wales noted that the accountancy profession has a key role to play in developing methodologies for helping decision-makers to successfully weigh up the long-term costs and benefits of sustainable procurement. He called on the profession to work with economists, academics, and the government to identify ways in which sustainability can be brought centre stage in the decision making process and supported by the appropriate cost benefit analysis. He said: "Accounting mechanisms have not, for the moment at least, kept pace with our requirements for sustainability information. And I would suggest we need that information as a matter of real urgency if we are to avert a growing series of man-made catastrophes in our over-crowded world." In conjunction with his speech, The Prince of Wales launched the first report from the Accounting for Sustainability Group, a task force convened to examine how public sector procurement policy can contribute towards sustainability and influence the whole economy in a more sustainable direction. Click to:

• Download the Report (PDF 465k).
• ICAEW Press Release (PDF 34k).

29 May 2005: IFRS financial statements and checklist for 2005

On 21 May 2005, we posted Deloitte's Model IFRS Financial Statements and Presentation and Disclosure Checklist for the year ended 31 December 2005 (PDF 851k), combined in a single document. For convenience, we are also making the two components available as separate PDF documents: Model IFRS Financial Statements for the year ended 31 December 2005 (PDF 384k). IFRS Presentation and Disclosure Checklist for the year ended 31 December 2005 (PDF 574k).

28 May 2005: Deloitte comments on proposed IFRS 6 amendments

We have posted Deloitte's comment letter on the Exposure Draft of Proposed Amendments to IFRS 6 and related amendments to IFRS 1 (PDF 57k), We support the amendments unreservedly. Here is an excerpt:

28 May 2005: Deloitte letter of comment on IFRIC D15

We have posted Deloitte's Comment Letter on IFRIC D15 Reassessment of Embedded Derivatives (PDF 45k), We support the interpretation and offer two suggestions for clarification (excerpt below). You will find all past comment letters (back to 1995) Here.

27 May 2005: Comparison of NZ-IFRSs and current NZ GAAP

Deloitte (New Zealand) has published NZ IFRS and NZ GAAP: A Comparison (PDF 340k). This guide compares New Zealand 'equivalents' to IFRSs, as adopted by the NZ Financial Reporting Standards Board (FRSB), and New Zealand's current financial reporting standards. In New Zealand, reporting entities are required to adopt NZ-IFRSs at the latest for periods beginning on or after 1 January 2007, and they may elect to do so for periods beginning on or after 1 January 2005. Early adoption before 1 January 2005 is not permitted. When an entity adopts NZ-IFRSs it must do so in their entirety, not piecemeal. There are a number of differences between NZ-IFRSs and IFRSs:

• wording has been amended to accommodate the New Zealand legislative environment, for example, references to the Financial Reporting Act 1993
• additional/amended requirements for public benefit entities
• in some cases the FRSB has permitted only one of a number of options available in the corresponding IFRS
• additional disclosures.

27 May 2005: Namibia adopts IFRSs
All domestic listed companies in Namibia are required to comply with IFRSs effective 1 January 2005 under the requirements of the Namibian Stock Exchange Act. Unlisted Namibian companies have the option to use IFRSs or Namibian GAAP. Namibia is working to harmonise national GAAP with IFRSs by 31 December 2007. Here is our complete list of Countries that Use IFRSs.

26 May 2005: Comparison of IFRSs and Chinese GAAP

Deloitte (China) has published a comparison of accounting standards in the People's Republic of China and International Financial Reporting Standards as of March 2005. The comparison is available in both English and Chinese. China has different levels of accounting standards that apply to different classes of entities. The comparison relates to the standards applicable to the largest companies (including all non-financial listed and foreign-invested enterprises) and identifies major accounting recognition and measurement differences. Click to download: Comparison between PRC GAAP and IFRS (English) (PDF 688k) Comparison between PRC GAAP and IFRS (Chinese) (PDF 675k) We are pleased to grant permission to accounting educators and students to make copies for educational use.

26 May 2005: Le nouveau monde de l'information financière: IFRS
The professional accounting body in France – la Compagnie Nationale des Commissaires aux Comptes (CNCC) – has launched www.focusifrs.com, a website for news about IFRSs. While most of the content is in French, there are some materials, including press articles and IASB and IFRIC Updates, in English. Focus IFRS includes news from the IASB, the European Commission, EFRAG, CNC (the French accounting standard setter), CESR, and others.

25 May 2005: Near-final draft of IFRS 7 is available to subscribers
The IASB has posted to the 'Subscribers' section of its website the near-final draft of IFRS 7 Financial Instruments: Disclosures. A near-final draft is one awaiting formal Board approval and for which only relatively small editorial changes are expected. IFRS 7 will replace IAS 30 Disclosures in Financial Statements of Banks and Similar Financial Institutions and also will replace the disclosure portions of IAS 32 Financial Instruments: Disclosure and Presentation. The standard will apply to all entities and will require disclosure of:

• the significance of financial instruments for an entity's financial position and performance; and
• qualitative and quantitative information about exposure to risks arising from financial instruments, including minimum disclosures about credit risk, liquidity risk, and market risk.

25 May 2005: Proposed wording of IFRS audit reports in the UK
The United Kingdom Auditing Practices Board (APB) has issued for comment a draft bulletin titled Auditor's Reports on Financial Statements. For all UK companies whose securities are publicly traded in the EU, the APB proposes that the auditor's report refer to conformity with IFRSs adopted for use in the European Union as the primary reporting framework:

25 May 2005: SEC Chairman Donaldson speaks about convergence
In Remarks before The Council on Foreign Relations (PDF 51k), US SEC Chairman William H. Donaldson introduced his comments on the benefits of global financial reporting standards with a quote from the late Walter Wriston: "Capital will always go where it is welcomed, and stay where it is well treated." Chairman Donaldson said:

25 May 2005: Agenda project summaries have been updated
We have updated the following agenda project summaries to reflect discussions and decisions at the IASB's May 2005 meeting:

• Accounting Standards for Small and Medium-Sized Entities
• Changes in Contributions to Employee Share Purchase Plans (ESPPs)
• Conceptual Framework
• Convergence: IAS 37
• Financial Instruments: Disclosures
• IAS 39 Revisions - Fair Value Option
• Insurance Contracts Phase II
• Liabilities Arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment
• Measurement
• Performance Reporting

25 May 2005: Report from the 20 May 2005 ARC meeting
At its meeting on 20 May 2005, the Accounting Regulatory Committee, which advises the European Commission on endorsement of individual IFRSs and IFRIC Interpretations for use in Europe, agreed unanimously to recommend endorsement of IFRS 6, IFRIC Interpretations 4 and 5, IFRIC's recent amendment to SIC 12, and the IASB's recent amendment to IAS 19, and related consequential amendments. ARC members also expressed strong support for the Commission's intention to endorse the IASB's proposed amendments to the Fair Value Option in IAS 39, pending publication of the amendments by the IASB. The Commission intends to seek the ARC's approval of these amendments at the ARC's next meeting on 8 July 2005. With respect to IFRIC 3 Emission Rights, in light of EFRAG's recommendation that the Commission not endorse IFRIC 3 for use in Europe, the Commission has asked the IASB to defer the effective date of IFRIC 3. If the effective date is not deferred, the ARC will be asked to decide on IFRIC 3 at its 8 July 2005 meeting. Click here to download the Summary Report of the May 2005 ARC Meeting" (PDF 36k). Background papers for the 20 May 2005 ARC meeting may be found at The ARC Website.

25 May 2005: Deloitte Chairman will speak at IFRS conference in Dubai
Piet Hoogendoorn, chairman of the Deloitte Touche Tohmatsu (DTT) Board of Directors, will speak at the World Accounting Summit being held in Dubai, United Arab Emirates, on 29 May to 1 June 2005. The conference is under the patronage of the United Nations Conference on Trade and Development (UNCTAD). The event will bring together senior representatives from the global standards setters and major accounting associations as well as principal advisers to multinational companies and key users and preparers of financial statements. A major step in the worldwide convergence of accounting standards, IFRSs present new opportunities for those in professional services – as well as difficulties, particularly with respect to consistent application. As DTT Chairman, Piet will discuss the challenges now being encountered with the adoption of IFRSs and how Deloitte member firms work to address client needs and concerns. Several other partners from Deloitte member firms will also be participating in this conference, including Abbas Ali Mirza, Deloitte Dubai; Stig Enevoldsen, Deloitte Denmark and current chair of EFRAG, Europe; and Asad Ali Shah, Deloitte Pakistan.

25 May 2005: EFRAG comment letter on IFRIC D12-13-14
The European Financial Reporting Advisory Group (EFRAG) has posted its Letter of Comment on IFRIC D12, D13, and D14 (PDF 89k) on accounting for service concession arrangements. EFRAG's overall conclusion: "We have a number of concerns with the draft interpretations. As a result, we would like to avoid an outcome where final interpretations would be issued along the lines of the draft interpretations."

24 May 2005: Reminder – comment deadlines next week

Deadlines for submitting comments on the following draft interpretations are one week from today (Tuesday 31 May 2005): IFRIC D12 Service Concession Arrangements – Determining the Accounting Model IFRIC D13 Service Concession Arrangements – the Financial Asset Model IFRIC D14 Service Concession Arrangements – the Intangible Asset Model IFRIC D15 Reassessment of Embedded Derivatives

23 May 2005: Near-final draft of IFRS 7 expected soon
The IASB plans to make available on its website in the next several days a 'near-final' draft of IFRS 7 Financial Instruments: Disclosures. The Board is still considering the issue of 'Day 1 profit disclosures' and has invited comment on the proposed drafting of this section of IFRS 7. The proposed disclosures were set out in pages 19-21 of the Observer Notes for the May Board meeting. Those notes may be Downloaded from the IASB's website. Comments should be sent to apryde@iasb.org by 1 June 2005.

23 May 2005: Agenda for IFRIC 2-3 June 2005 meeting
The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday and Friday, 2-3 June 2005. The agenda for the meeting is presented below.

2-3 June 2005, London Thursday 2 June 2005 IAS 19 Employee Benefits – Effect of Minimum Funding Requirements on the Asset Ceiling Emission Rights - Consideration of a Proposed Amendment of Revised Draft IAS 38 — The IFRIC will consider a draft of an amendment to IAS 38. The objective of the amendment is to address the measurement mismatches that arise in accounting for an emission rights scheme in accordance with IFRIC 3. IAS 12 Income Taxes – Deferred Tax Relating to Finance Leases Impairment of an Equity Security – Draft Reason for Rejection of Issue IAS 19 Priorities Consideration of Recommendations of Agenda Committee as tabled at March/April Meeting of IFRIC from February Agenda Committee Meeting IFRIC D11 Changes in Contributions to Employee Stock Purchase Plans Friday 3 June 2005 IAS 32 Financial Instruments: Disclosure and Presentation – Cross Currency Convertible Bonds IFRIC D9 Employee Benefit Plans with a Promised Return on Contributions or Notional Contributions Tabling from March Agenda Committee of Wording for Issues Proposed for Rejection Activities of Other Interpretive Bodies

21 May 2005: IFRS financial statements and checklist for 2005

We have posted Deloitte's comprehensive Model IFRS Financial Statements and Presentation and Disclosure Checklist for the year ended 31 December 2005 (PDF 851k). These model financial statements were developed to illustrate the typical financial statement presentation and disclosures that are required of a company with subsidiaries and associates presenting its consolidated financial statements under IFRSs for 2005.

21 May 2005: 13^th UK webcast update – interim reporting
The Deloitte London IFRS Centre of Excellence is running a monthly series of hour-long Internet-based IFRS technical updates, focusing on the most important international accounting standards and how they will affect UK companies. The thirteenth session was run on Thursday 19 May 2005 and focused on the rules applying to the 2005 interim financial statements of listed UK groups and the requirements of IAS 34 Interim Financial Reporting. To access the recording Click Here. The recording of each session will be available on this website for a period of at least 3 to 4 weeks from the date of the presentation. Links to past sessions may be found on our United Kingdom Page.

20 May 2005: Two draft interpretations on IFRS 2
The International Financial Reporting Interpretations Committee (IFRIC) has published two draft Interpretations relating to IFRS 2 Share-based Payment:

• D16 Scope of IFRS 2, and
• D17 IFRS 2: Group and Treasury Share Transactions.

20 May 2005: CESR proposals on alternative performance measures
The Committee of European Securities Regulators (CESR) has published a consultation paper setting out CESR's draft recommendations on Alternative Performance Measures (PDF 101k). The draft recommendation contains several proposals to encourage European listed companies to provide the financial markets with appropriate and useful performance measures. The recommendations relate primarily to:

• Clear definitions of alternative performance measures. CESR notes that IFRSs define three basic performance measures – revenue, profit or loss, and earnings per share. Other measures that an entity may choose to report must not be inconsistent with the IFRS measures.
• The presentation of alternative performance measures – they should be in addition to, not instead of, IFRS performance measures and should be presented with less prominence than the IFRS measures.
• Auditor's involvement should be considered.

19 May 2005: Notes from Board meeting 18 May 2005
We have combined all of the preliminary and unofficial notes taken by Deloitte observers at the IASB's May 2005 Board meeting onto a Separate Page.

18 May 2005: Notes from Board meeting 17 May 2005
We have combined all of the preliminary and unofficial notes taken by Deloitte observers at the IASB's May 2005 Board meeting onto a Separate Page.

17 May 2005: CILEA sees a key need for IASB SME standards
The Board of the Committee for Integration of Latino Europe and America (CILEA), a body representing 24 economic and accounting professional organisations of 18 Latin European and American countries, has called on the IASB to develop standards for small and medium-sized entities "to stimulate the creation and the development of a basic entrepreneurial activity" and, at the same time, "assure an effective corporate control system to guarantee the reliability of accounting data." Click for Press Release (PDF 325k).

17 May 2005: SEC statement and report on internal controls
The US Securities and Exchange Commission has released a statement about the first year's experience in applying the internal control provisions (Section 404) of the Sarbanes-Oxley Act. The two main conclusions in the Commission's statement are:

• Compliance with Section 404 is producing benefits, including a heightened focus on internal controls at the top levels of public companies.
• Implementation in the first year also resulted in significant costs, and the process can be made more effective and efficient.

• SEC Commission Statement (PDF 38k)
• SEC Staff Statement (PDF 135k)
• PCAOB Press Release (PDF 120k)
• PCAOB Staff Q&A (PDF 220k)

17 May 2005: Notes from Board meeting 16 May 2005
We have combined all of the preliminary and unofficial notes taken by Deloitte observers at the IASB's May 2005 Board meeting onto a Separate Page.

14 May 2005: Benefits for Australia in EC-SEC agreement
The Australian Securities & Investments Commission (ASIC) has expressed support for the agreement between the US Securities and Exchange Commission (SEC) and the European Commission on a 'roadmap' toward eliminating the current SEC reconciliation between IFRSs and US GAAP. ASIC sees this as beneficial for Australia because Australian companies listed in the United States would no longer have to prepare the reconciliation. Further, since Australia has adopted IFRS equivalents, "it will also encourage US investment in the Australian capital market and facilitate Australian companies access to US finance if IFRS and US GAAP financial reports are determined to be convergent and provide comparable high quality financial reporting. Click for ASIC Press Release (PDF 44k).

13 May 2005: CFA Institute corporate governance manual

CFA Institute has published The Corporate Governance of Listed Companies: A Manual for Investors, a comprehensive guide to help analysts and investors around the world assess a company's corporate governance policies and the associated risks they need to consider before making investment decisions. The manual also can be used by securities issuers to develop a better understanding of what investors are looking for in well-governed companies. Specifically, the manual lists what investors and shareowners should consider in terms of board practices, management practices, and shareowner rights as they evaluate whether the company's corporate governance structure creates risks that could affect shareowner wealth. Click to download: Corporate Governance Manual* (PDF 379k) Press Release (PDF 24k) *Copyright 2005 CFA Institute. Reproduced and republished from The Corporate Governance of Listed Companies: A Manual for Investors with permission from CFA Institute. All rights reserved.

13 May 2005: New Global Offerings Services newsletter

We have posted the April Edition of the Deloitte Global Offerings Services Newsletter (PDF 305k). Global Offerings Services is a global team of Deloitte practitioners assisting non-US companies and non-US practice office engagement teams in applying US and International accounting standards (that is, US GAAP and IFRSs) and in complying with the SEC's financial reporting rules. Past GOs Newsletters are Here.

13 May 2005: Where did our last 500 visitors come from?
Are you curious where the last 500 visitors to IAS Plus came from? Take a Look at a Map in Real Time. Allow a few seconds for download. Also, Map of Last 100. We've put permanent links at the bottom of this home page. If you think there's no interest in IFRSs in the United States, check these maps during US business/evening hours.

12 May 2005: EFRAG supports proposed amendments to IFRSs 1 and 6
EFRAG has invited comments (by 31 May 2005) on its Draft Letter to the IASB concerning the IASB's proposed small amendments to IFRS 6 and IFRS 1. The amendments would clarify that an entity that both (a) adopts IFRSs for the first time before 1 January 2006 and (b) applies IFRS 6 before that date is exempted not only from providing comparative prior-period disclosures but also from applying the recognition and measurement requirements of IFRS 6 in the prior comparative period. EFRAG supports the IASB proposal.

12 May 2005: New comprehensive China accounting standards section

Please visit our new section presenting a Comprehensive Overview of Chinese Accounting Standards (CAS), including:

History of development of CAS China Accounting Law English translations of all standards English translation of the comprehensive Accounting System for Business Enterprises Accounting guidelines for specific industries Other accounting pronouncements Accounting System for Financial Institutions Accounting System for Small Business Enterprises China's movement towards convergence with IFRSs and challenges

We will announce additions to this section in the coming months.

11 May 2005: IASCF invites nominations for SAC chairman
The Trustees of the IASC Foundation, under which the IASB operates, have invited applications for a part-time chairman of the IASB's Standards Advisory Council (SAC). Heretofore, under the IASCF constitution, the Chairman of the IASB was also formally the chair of SAC, though one of the SAC members has presided at the meetings. The Trustees are changing this to have an independent SAC chairman. The deadline for applications is 8 June. Click for Press Release (31k).

10 May 2005: Deloitte Australia welcomes AASB convergence proposal
Deloitte Australia has today issued a News Release (PDF 24k) welcoming the Australian Accounting Standards Board's decision to issue an exposure draft that would fully converge AASB 3 Business Combinations with IFRS 3. Under the AASB proposal, business combinations involving entities under common control would be removed from the scope of AASB 3, as would certain Australian-specific requirements. As a result, common control business combinations will be accounted for in the same manner under AASB 3 and IFRS 3. Deloitte Australia has been a long-term critic of the AASB's scope amendments to IFRS 3 when originally creating the local Australian standard, most recently in this Letter of Comment to the AASB (PDF 509k).

10 May 2005: Guidance for auditing first-time adoption of IFRSs
The United Kingdom Auditing Practices Board (APB) has published Draft Bulletin 2005/3 setting out further interim guidance for auditors on first-time application of IFRSs in the United Kingdom and the Republic of Ireland. In August 2004 the had APB published preliminary guidance on issues that may arise when companies make the transition from UK/Irish GAAP to IFRSs. The new Bulletin reflects a number of additional issues, including the auditor's review of interim financial information in the first year of adoption of IFRSs. The Bulletin notes:

• Download the Interim Guidance 2005-3 (PDF 269k).
• Press Release (PDF 25k).

10 May 2005: What exactly is convergence?
We have posted an article titled What Exactly Is Convergence? (PDF 198k) by Paul Pacter, IAS Plus webmaster. Paul's article discusses different national and regional approaches to converging local GAAP with IFRSs and the progress in various countries around the world. It was published in a special issue of the International Journal of Accounting, Auditing and Performance Evaluation devoted to "the new value-relevant global financial reporting model" (copyright 2005 by Inderscience and posted with the kind permission of the publisher).

10 May 2005: SEC will make comment letters public
Starting 12 May 2005, the US Securities and Exchange Commission will begin publicly releasing comment letters and response letters sent to registrants relating to disclosure filings made after 1 August 2004 and reviewed by the Division of Corporation Finance and the Division of Investment Management. The letters will be released individually through the SEC's EDGAR system at www.sec.gov not earlier than 45 days after the review of the disclosure filing is complete.

9 May 2005: IASB European 'Roadshow' dates announced
The IASB is organising a series of 'Roadshows' jointly with national standard setters in a number of European countries. Typically, each event will include a three-hour meeting of several Board and staff members with 20 or so CFOs and CAOs and a press briefing. The focus of the discussion will be the Board's current and future projects. The schedule is as follows:

The Hague, Netherlands – Monday 6 June 2005

Frankfurt, Germany – Wednesday 8 June 2005

Copenhagen, Denmark – Thursday 9 June 2005

Helsinki, Finland – Friday 10 June 2005

Rome, Italy – Monday 13 June 2005

Brussels, Belgium – Wednesday 15 June 2005

Vilnius, Lithuania – Wednesday 15 June 2005

Vienna, Austria – Friday 17 June 2005

Oslo, Norway – Monday 27-Tuesday 28 June 2005

Lisbon, Portugal – Thursday 30 June-Friday 1 July 2005

Zurich, Switzerland – Monday 4-Tuesday 5 July 2005

London, United Kingdom – Friday 8 July 2005

Stockholm, Sweden – Tuesday 13 September 2005

Dublin, Ireland – Expected in September 2005

Paris, France – Expected in September 2005

Athens, Greece – To be confirmed

Warsaw, Poland – Expected in September 2005

7 May 2005: EFRAG recommends that the EC not endorse IFRIC 3
The European Financial Reporting Advisory Group (EFRAG) has submitted its advice to the European Commission on IFRIC Interpretation 3 Emission Rights recommending that the Commission not endorse IFRIC 3 for use in Europe. EFRAG's primary reason is that:

7 May 2005: Deloitte comment letter on service concessions
We have submitted our comment letter on IFRIC's suite of three Draft Interpretations on Service Concession Arrangements. Service concessions are arrangements whereby a government or other body grants contracts for the supply of public services, such as roads, energy distribution, prisons, or hospitals, to private operators. The draft interpretations establish two accounting models – the financial asset model and the intangible asset model. The appropriate model depends on whether the grantor or the users have the primary responsibility to pay the operator for the concession services. Click to download the Deloitte Comment Letter (PDF 135k). Here is an excerpt:

6 May 2005: Comparison of Canadian GAAP and IFRSs
In April 2005, the Accounting Standards Board (AcSB) of Canada invited comments on its draft strategic plan, Accounting Standards in Canada: Future Directions. The draft plan includes the AcSB's proposal that public companies in Canada should follow IFRSs rather than Canadian GAAP, with a five-year transition period. To give commentators on the plan a better basis for understanding the extent of change that the proposed convergence to IFRSs might entail, the AcSB staff have prepared a high-level comparison of Canadian standards and IFRSs as of 31 March 2005. AcSB staff are also developing a more detailed comparison for those interested in comparison at a technical level. That comparison is expected to be available before 31 July 2005. Click:

• Download the Comparison of IFRSs and Canadian GAAP as of 31 March 2006 [updated from 2005] (PDF 286k).
• More Information about AcSB's Strategic Plan
• Other Comparisons of IFRSs and National GAAP

6 May 2005: EC seeks 'political accountability' for IASB
In a Green Paper on Financial Services Policy (2005-2010), the European Commission sets out its financial services policy priorities for the next five years, with the goal of fostering an integrated, open, and competitive financial market "where financial services and capital can circulate freely at the lowest possible cost throughout the EU – with adequate and effective levels of prudential control, financial stability and a high level of consumer protection." The regulation requiring IFRSs for European listed companies and permitting member states to extend IFRSs to unlisted companies is part of that policy. The Green Paper suggests that the oversight and accountability of the IASB need to be strengthened:

• Green Paper on Financial Services Policy (2005-2010) (PDF 70k)
• Annex 1 (PDF 69k)
• Annex 2 (PDF 33k)

6 May 2005: May Board meeting agenda is announced
The IASB will hold its monthly Board meeting on Monday to Wednesday, 16 to 18 May 2005 at its offices in London. The agenda for the meeting is presented below.

16-18 May 2005, London Monday 16 May 2005 (afternoon only) Measurement on Initial Recognition – Draft Discussion Paper Measurement Bases for Financial Accounting: Measurement on Initial Recognition Short-term Convergence – Provisions, Contingent Liabilities and Contingent Assets Tuesday 17 May 2005 Insurance Contracts – Non-life insurance accounting Accounting Standards for Small and Medium-sized Entities (SMEs) – Approach to considering possible presentation and disclosure modifications of IFRSs for SMEs. Conceptual Framework – Qualitative characteristics of financial information Performance Reporting – Impact of April Board decisions on Segment A topics on EPS Wednesday 18 May 2005 (morning only) IFRIC X Liabilities Arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment – Approve a proposed Interpretation Share-based Payment – Following the IFRIC's recent discussion of D11, the Board will consider whether to amend IFRS 2 re cancellations and the definitions of vesting conditions IFRS 7 Financial Instruments - Disclosures – Day 1 profit disclosures and amendments to IFRS 4

6 May 2005: Problem with IAS 27 for UK companies
The Institute of Chartered Accountants in England and Wales (ICAEW) has submitted to the IASB and others a briefing paper on a problem in applying IAS 27 Consolidated and Separate Financial Statements by companies in the United Kingdom (and, most likely, elsewhere). IAS 27 requires investors to recognise income from a subsidiary "only to the extent that the investor receives distributions from accumulated profits of the investee arising after the date of acquisition". Any distributions received out of preacquisition profits are treated as a recovery of part of the cost of the investment. Because of the retrospective transition requirements of IFRS 1 for first-time adopters of IFRSs, "a parent company must examine all past distributions made by each of its subsidiaries to determine whether they were paid from pre-acquisition profits. Some parent companies have a substantial number of subsidiaries and will need to locate and examine data – which in some cases may no longer be available or obscured by intra-group reorganisations – from the date of the initial acquisition of the investment. In many cases this is likely to prove a highly onerous task." The ICAEW urges an early amendment to IFRS 1 to ease the burden. Click to Download the ICAEW Briefing Paper (PDF 29k).

6 May 2005: Agenda project pages updated
We have updated the following agenda project pages to reflect discussions at the Board's April 2005 meeting:

• Conceptual Framework,
• Extractive Industries,
• Financial Instruments – Comprehensive Project,
• IAS 39 Fair Value Option,
• IAS 39 Financial Guarantees and Credit Insurance,
• IFRS 6 – Small Amendment,
• Insurance Contracts,
• Performance Reporting, and
• Short-term Convergence – IAS 12.

5 May 2005: Deadline for replies to SME questionnaire is extended
In response to requests from constituents, the IASB has extended until 30 June 2005 the deadline for replies to the staff questionnaire on accounting standards for small and medium-sized entities (SMEs). The questionnaire seeks views on whether any of the accounting recognition and measurement principles in International Financial Reporting Standards should be modified for SMEs. Click to Download the IASB Press Release (PDF 42k). Click here for More Information about the Questionnaire.

5 May 2005: SEC will report on off-balance-sheet items
In remarks at the Spring Forum of the American Academy of Actuaries in Washington on 3 May 2005, US SEC Chief Accountant Donald T. Nicolaisen said that later this month the SEC will be releasing a report on special purpose entities, off-balance-sheet liabilities, and related matters including leases and pensions. Section 401 of the Sarbanes-Oxley Act requires the SEC to study the filings by issuers and their disclosures to determine the extent of off-balance sheet transactions (including assets, liabilities, leases, losses, and the use of special purpose entities) and whether generally accepted accounting rules result in financial statements of issuers reflecting the economics of such off-balance sheet transactions to investors in a transparent fashion.

4 May 2005: FAF annual report discusses international convergence
The 2004 Annual Report of the Financial Accounting Foundation (PDF 1.88mb, link to the FASB website), under which FASB operates, discusses international convergence of accounting standards in numerous places, including an interview with FASB Chairman Robert H. Herz. Mr. Herz notes that "the FASB's standard-setting activities are guided by three key objectives: (1) improvement of financial reporting, (2) simplification of the accounting literature and the standard-setting process, and (3) international convergence." Several of the interview Q&A relate to convergence, including this one:

4 May 2005: New illustrative examples on 'service concessions'
On 3 March 2005, the International Financial Reporting Interpretations Committee (IFRIC) released for public comment Three Related Draft Interpretations:

• D12 Service Concession Arrangements – Determining the Accounting Model
• D13 Service Concession Arrangements – the Financial Asset Model
• D14 Service Concession Arrangements – the Intangible Asset Model

4 May 2005: US SEC and Japan FSA discuss global convergence
US SEC Chairman William H. Donaldson and Japan Minister of State for Financial Services Tatsuya Ito met on 3 May 2005 in Washington and discussed, among other things, expanding the use of high-quality global accounting standards. The SEC's Announcement (PDF 30k) said that "Chairman Donaldson and Minister Ito affirmed their support for the convergence of accounting standards and agreed that dialogue between the US Financial Accounting Standards Board (FASB) and the Accounting Standards Board of Japan (ASBJ) is an important element in the overall convergence program."

4 May 2005: SEHK adopts IFRS transition disclosures
The Stock Exchange of Hong Kong has adopted IFRS Transition Disclosure Requirements for initial listing documents and circulars (PDF 49k). These disclosures relate to the impact of the transition in Hong Kong, as of 1 January 2005, to accounting standards that (except for effective dates) are word-for-word equivalents of IFRSs.

3 May 2005: IFAC welcomes expansion of IASB SME working group
The International Federation of Accountants (IFAC) has issued a Press Release (PDF 75k) welcoming the recent expansion of the IASB's Working Group on Standards for Small and Medium-sized Entities (SMEs). The expansion was aimed at bringing more preparers and users of SME financial statements as well as others with particular SME expertise onto the IASB's advisory group. Last month, the IASB released a staff questionnaire seeking views on possible modifications of the recognition and measurement principles in IFRSs for use in IASB standards for SMEs. Click for SME Project Information.

2 May 2005: IASB proposes an amendment to IFRS 6
The IASB is seeking comments by 3 June 2005 on a proposed small amendment to IFRS 6 Exploration for and Evaluation of Mineral Resources and, as a consequence, an amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards. You can Download the Exposure Draft from the IASB's website. The proposed amendment would clarify that an entity that both (a) adopts IFRSs for the first time before 1 January 2006 and (b) applies IFRS 6 before that date is exempted not only from providing comparative prior-period disclosures but also from applying the recognition and measurement requirements of IFRS 6 in the prior comparative period. The Board hopes to issue the final amendment before 30 June 2005.

2 May 2005: New Accounting Roundup newsletter posted

We have posted the 29 April 2005 Edition of Accounting Roundup (PDF 154k) from Deloitte & Touche (United States). This issue includes:

• FASB developments - including a proposed FSP on warrants on redeemable shares and proposed DIG guidance on FAS 133
• EITF developments - including a proposed amendment to an EITF Issue on the equity method)
• GASB developments - including Concepts Statement 3 Communication Methods in General Purpose External Financial Reports that Contain Basic Financial Statements and preliminary views on pollution remediation obligations
• SEC developments - including a final rule on first-time application of IFRSs and deferral of the compliance date for FAS 123R)
• PCAOB developments - including a proposed standard on reporting on elimination of a material weakness
• International developments - including amendment of IAS 39 hedge accounting provisions, extension of the comment period on the IFRIC draft interpretation on service concessions, and the staff questionnaire on recognition and measurement principles for small entities).

1 May 2005: FEE briefing note on amendments to directives
The Federation of European Accountants (FEE) has published a Briefing Note (PDF 35k) commenting on the European Commission's proposal to amend the existing 4th and 7th Directives to improve corporate transparency and governance. While FEE supports the Commission's overall objectives, the briefing note expresses some concerns:

• The location of the corporate governance statement and related audit implications cause 'serious problems' that may inhibit development of disclosure.
• The need to clarify the types of 'arrangements' that must be disclosed (including beneficial interests, special purpose entities, and off-balance-sheet arrangements).
• Disclosure requirements for related party transactions should not go beyond IAS 24. In addition, we wish to share some observations on the internal control disclosure requirement proposed.
• At this stage, FEE believes that disclosures about risk management and internal control should be limited to a description of the main features of a company's internal controls over financial reporting.

1 May 2005: Guidance on disclosing IFRS impact
The Australian Securities and Investments Commission (ASIC) has outlined its expectations about the nature and extent of disclosure required under Australian Accounting Standard AASB 1047 Disclosing the Impacts of Adopting Australian Equivalents to International Financial Reporting Standards for 30 June 2005 annual financial reports. To help inform users of financial statements about the change to IFRSs, AASB 1047 requires disclosure of:

• any known or reliably estimable information about the quantified impacts on the financial report had it been prepared using IFRSs; or
• if such impacts are not known or reliably estimable, a statement to that effect. In this case AASB 1047, suggests that entities should also update their disclosures made in 2004 about the management of the transition to IFRSs and the explanation of the key differences in accounting policies expected to arise.